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HOW TO USE CREDIT CARDS

DO YOU WANT to become a much savvier credit card user? LOVE ‘em or hate ‘em, cash is slowly dying, and plastic is here to stay! Credit cards are virtually essential in today’s society and are an uber convenient paying tool that also gives you the freedom to manage your finances and the security necessary for those unexpected emergencies!

Credit cards are very powerful financial tools, and they must be used very carefully in order to avoid becoming trapped in what’s known as a “cycle of debt”. Just remember, almost anything that tempts you to carry a balance is basically a no-no when it comes to credit, and spending beyond your means is never a good idea!

There are actually many situations where using your credit card will pay off for you big time, and to help you maximize these perks/protections, check out the points below re how using plastic for your purchase can be worthwhile.

DID YOU KNOW…

VISA stands for Visa International Service Association?

there are enough credit cards in circulation to span the earth 3.5 times!

40% of households rely on credit cards to pay for regular living expenses

Air Miles Canada’s rewards program launched way back in 1992, is Canada’s largest loyalty program, and two out of three Canadians regularly collect points from purchases via participating merchants. These points can be redeemed against flights with specific airlines, or for other products/services. Please keep in mind there are many travel rewards programs and some offer more than offers, so do your research!

BIG-TICKET ITEMS

Throwing your new big-screen TV on your credit card is actually a smart way to go and here’s why; many credit cards offer protection that comes in very handy with large purchases, eg complimentary extended warranties on certain purchases, oh and if you have a rewards card, a large purchase can go a super long way towards your rewards total.Some cards even offer “price protection” which means if you see the product advertised at a lower price within a certain window of time, the credit card company will refund the difference.

GYM MEMBERSHIPS

You may want to use a credit card as a firewall on recurring charges just in case you need to dispute something.

MONTHLY EXPENSES

Putting your regular monthly expenses eg cell phone bill and utility bill, on a credit card via scheduled automatic payments not only helps with your budget and staying up-to-date on payments, but this only works if you’re a rockstar budgeter who plans to pay the full balance each month. Even putting rent on your credit card [many landlords are becoming more open to this idea!] goes a very long way to building credit, and is easy peasy; no post-dated cheques, no mail delays, no postage hassles.

SERVICE PROVIDER PURCHASES

It’s sometimes a good idea to pay service providers such as contractors or landscapers with a credit card [provided they accept them] since it offers certain protection if you end up dissatisfied with their service. DID YOU KNOW you can stop a credit card payment?

Sometimes it’s a very good idea to charge items you plan on writing off on your taxes at the end of the year since the credit card statement can serve as a receipt for same; essentially, it’s a great record-keeping tool. For example, you might want to charge gas if you have a significant commute and are claiming it as a work expense.

TAXES

Canada Revenue Agency [CRA] accepts credit card payments online, but it has been my experience that they will also accept payment plans with little to zero interest payments though.

TRAVEL

Almost all hotels require a credit card to book/hold a reservation and some credit cards even include secondary travel insurance coverage. Remember when taking a vacation, it’s to take a break from your probable stressful life, do you really want to come back owing more debt. Have a getaway that is within your means or save until you have enough for your dream vacation.

WEDDINGS

Planning a wedding is never easy; try and remember to live within your means because starting your new life together with a tsunami of debt is rarely worth the “dream” wedding!

THE BOTTOM LINE…

I can’t emphasize enough that every credit card is very very different, and it’s absolutely crucial to read the fine print and if you don’t understand it, call/e-mail the credit card company for clarification. Always remember that the smartest thing you can do is spend within your means, and whenever possible, pay the full balance every month! If you’re ever in a bit of trouble with credit card debt, please contact us at ResCom Mortgage Solutions for info re debt consolidation.

“Procrastination is like a credit card; it’s a lot of fun until you get the bill.” | Christopher Parker

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